No. 13-1687
_____________________________________
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
______________________________________
EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION,
Plaintiff-Appellant,
v.
PROPAK LOGISTICS, INC.,
Defendant-Appellee.
United States District Court
for the
Western District of North Carolina
Civil Action No. 1:09-cv-00311-MR-DLH
__________________________________________________________________
APPELLANT EEOC’s OPPOSITION
TO PROPAK’S MOTION FOR
APPELLATE ATTORNEYS’ FEES AND EXPENSES
__________________________________________________________________
At this Court’s direction, and in opposition
to Propak’s motion for reimbursement of its appellate attorneys’ fees and
expenses, Appellant Equal Employment Opportunity Commission (EEOC) hereby states:
1. After dismissing EEOC’s lawsuit based on laches, the
district court awarded Propak $189,113.50 in attorneys’ fees. EEOC v.
Propak Logistics, Inc., 2013 WL 1232959 (W.D.N.C. Mar. 27, 2013). The
district court stated that “events that occurred during the EEOC’s
administrative investigation precluded the EEOC from obtaining either
injunctive or monetary judicial relief,” and this Court affirmed on that basis.
EEOC v. Propak Logistics, Inc., 746 F.3d 145, 147 (4th Cir. 2014).
Propak now asks this Court to award appellate fees and expenses of
$156,731.54—almost as much as Propak sought below for the three years it litigated
this case in district court. EEOC respectfully urges this Court to deny
Propak’s application because, although this Court ultimately rejected EEOC’s
arguments on appeal, those arguments were not “frivolous, unreasonable, or
without foundation” under Christiansburg Garment Co. v. EEOC, 434 U.S.
412 (1978), the standard that Propak agrees applies to this fee application. See
Propak motion at ¶¶ 4-8, 12.
2. Propak claims that its application for appellate
fees satisfies this standard on two grounds: that EEOC’s appeal was
unreasonable from the outset, and that EEOC unreasonably multiplied the
appellate proceedings by moving to supplement the record on appeal. Fees are
not warranted under either basis.
3. At the outset, EEOC emphasizes that its appeal
involved only the district court’s fee award. EEOC initially appealed
the district court’s dismissal order based on laches. Prior to briefing,
however, and after careful consideration of the substance of the district
court’s order and the implications of appeal, EEOC moved to dismiss the appeal
voluntarily. EEOC acted based on two prudential considerations—the growing
length of time that had elapsed since the underlying discrimination alleged in
this case, which would undermine the EEOC’s ability to obtain victim-specific
relief, and the fact that it had become apparent Propak would not resume
operations at the Shelby, North Carolina, site, which undermined the basis for
the EEOC’s claim for injunctive relief.
4. After this Court granted EEOC’s motion for voluntary
dismissal, the district court awarded Propak fees. EEOC v. Propak Logistics,
Inc., 2013 WL 1232959, at *1-2 (W.D.N.C. March 27, 2013). EEOC then appealed
the fee award because (a) it presented the different, and very important,
question of whether that award was proper under Christiansburg’s narrow
grounds for awarding fees to a prevailing Title VII defendant, and (b)
EEOC believes it has a responsibility to protect the federal fisc from fee awards
that fall outside Christiansburg’s narrow standard. But as is evident
from EEOC’s prior, voluntary dismissal of its appeal from the laches ruling,
EEOC made an effort to be reasonable and measured in what EEOC presented to
this Court for review.
5. This Court disagreed with EEOC that the district
court abused its discretion in awarding fees, concluding that EEOC “acted
unreasonably in filing the complaint because ‘by the time the EEOC determined
to bring this action it was abundantly clear that a lawsuit would be moot and
thus it was unreasonable to have filed it.’” Propak, 746 F.3d at 150
(quoting 2013 WL 1232959, at *4). But in affirming on that basis, this Court
acknowledged that much of the district court’s nineteen-page order awarding
fees discussed the same laches-related factors on which the district court had
granted summary judgment. Propak, 746 F.3d at 152.
6. Christiansburg would not justify a fee award
for this appeal because the EEOC reasonably believed that it had sound
arguments (a) that the district court erroneously based its fee award on
irrelevant laches factors and (b) that the district court had no factual
basis for its conclusion that EEOC’s lawsuit was moot at its inception.
7. The district court’s extensive discussion of laches-related
factors in its decision awarding fees is what led EEOC to argue on appeal (as
this Court noted) “that the district court improperly based its decision
awarding attorneys’ fees on the court’s earlier laches ruling” and improperly
“engaged in ‘hindsight logic’ in explaining its award of attorneys’ fees by
referencing its earlier laches holding and the prejudicial delay caused by the
EEOC.” Propak, 746 F.3d at 152. Although this Court rejected EEOC’s
argument, EEOC submits that it was not unreasonable for EEOC to have appealed
on this basis, given the district court’s extensive reiteration of the laches
considerations in its decision awarding fees.
8. The arguments Propak made to the district court in
support of a fee award also led EEOC to believe that the thrust of the court’s
rationale for awarding fees was based on its assessment of the laches issue. See
R.46-2 (JA-517-525).
9. Propak’s fee application emphasized that the
findings in the court’s laches decision of unreasonable delay and resulting
prejudice justified the imposition of fees under Christiansburg. See
R.46-2 at 1-2 (referring to “Propak’s successful laches defense”); 5 (“The very
nature of a successful laches defense . . . supports Propak’s motion for fees”);
7 (chastising EEOC for proceeding when “EEOC was aware that Propak was relying
upon a laches defense”); 8 (“EEOC should have been aware that this litigation
was unreasonable from the outset . . . . Nevertheless, the EEOC . . .
oppos[ed] Propak’s motion to dismiss based on laches even though the material
facts had been established”); and id. (stating that EEOC’s litigation
was unreasonable because discovery revealed managers no longer worked for
Propak; the Shelby facility was closed; Propak business records were lost;
Propak lacked any knowledge of current location of past managers; and former
managers would not likely recall events from 2002 through 2004). See also
Propak Reply Brief (R.51 at 3-8) (JA-542-547) (reiterating, in support of fee
application, the same laches-related facts); id. at 4 (JA-543)
(stating: “Nowhere in its Response does the EEOC deny knowledge of the facts
this Court found to support Propak’s laches defense.”).
10. Propak mentioned the “mootness of the relief sought”
in its fee application below, but only in reference to Propak’s closure of the
Shelby site. See, e.g., R.46-2 at 7 (JA-523). Propak’s reply
asserted that “the EEOC knew that even it had difficulty contacting witnesses,”
R.51 at 4 (JA-543), but the context indicates Propak was referring to EEOC’s
efforts to locate Propak’s former managers, not EEOC claimants.
11. Accordingly, EEOC’s district court response focused
on laches arguments and not on whether EEOC had identified claimants before
filing suit. See, e.g., R.49 at 5 (JA-531); 12 (JA-538) (“A dismissal
based on laches is not, by itself, grounds for an award of attorneys’ fees.”)
(citation omitted).
12. Given Propak’s focus on laches in its application for
fees below and the district court’s extensive discussion of laches factors in
its fee award, the EEOC reasonably believed that it was appropriate to appeal
the district court’s fee award to the extent it was based on the laches
ruling. EEOC’s appeal on this basis was not “frivolous,” “unreasonable,” or
lacking foundation, as required by Christiansburg for an award of
appellate fees.
13. EEOC also addressed, on appeal, the district court’s
statements that EEOC’s lawsuit was unreasonable because EEOC filed suit without
having identified any claimants who were entitled to monetary relief. The
district court’s finding on this point was somewhat unclear. The court’s
comment that by the time EEOC filed suit “it was abundantly clear that a
lawsuit would be moot” came at the end of a lengthy discussion of the factors
on which the court had relied in dismissing EEOC’s lawsuit based on laches. In
this context, EEOC did not understand the court’s comment to signal that its
rationale for awarding fees was wholly separate from the court’s previous
laches determination. EEOC nevertheless argued on appeal that to the extent
the district court awarded fees based on the court’s belief that EEOC “could
not locate purported victims,” see 2013 WL 1232959, at *4, the record
does not support such a conclusion and the district court was simply wrong as a
matter of fact. EEOC Opening Brief at 41-44 & n.9; EEOC Reply Brief at 28.
14. This Court disagreed, stating that the district court
had made a factual finding to this effect, and that finding was not clearly
erroneous because EEOC had provided no evidence that the prospective claimants EEOC
identified and interviewed actually fell within EEOC’s definition of the target
class.
746 F.3d at 152-53. Although this Court rejected EEOC’s appellate
arguments on this point, EEOC had a reasonable basis for challenging this basis
for the district court’s fee award.
15. EEOC reasonably believed that the district court’s
finding was clearly erroneous because nothing in the record supported the
court’s conclusion. The district court stated that “[b]y the time this action
was filed, . . . [t]he purported class of individuals allegedly discriminated
against had last existed in 2004 and it was uncertain that those individuals
could even be identified.” 2013 WL 1232959, at *4 (emphasis added).
The court cited as support two pages in its prior laches decision, R.41 at
13-14 (JA-424-425), but those pages make no mention of EEOC claimants. See
R.41 at 13-14 (JA-424-425)). The pages refer only to “past employees who had
worked in the Shelby facility in 2002 through 2004.” See R.41 at 14-15
(JA-425-426). Past employees, however, obviously do not refer to EEOC’s
claimants, as EEOC’s hiring claim was brought on behalf of individuals whom
Propak never hired.
16. The district court, in its fee decision, also stated
that “[t]he EEOC knew by November 2007 that it could not locate purported
victims and witnesses” and, in response to EEOC’s argument that monetary
damages were still available even though the Shelby facility had closed, that
“this argument overlooks the fact that the class of victims could not be
identified.” See id. at *4 & n.3 (citing EEOC’s memorandum in
opposition to fees). The district court cited no record support for either of
these two statements concerning EEOC’s identification of victims, and EEOC
believed the statements to be untrue.
17. Propak also seeks fees on the ground that EEOC
unnecessarily multiplied the appellate proceedings by moving for judicial notice
and to supplement the record.
Under Christiansburg, however, a court may award fees to a prevailing
Title VII defendant only when it finds that the plaintiff’s claim is
unreasonable. See Christiansburg, 434 U.S. at 422. Title VII therefore
constrains a court’s discretion to award fees. Questions surrounding EEOC’s
conduct in filing motions do not implicate the reasonableness of EEOC’s claim
or appeal, although courts of course have other remedies to address improper motions.
Greenberg v. Hilton Int’l Co., 870 F.2d 926, 940 (2d Cir. 1989) (“Unlike
Rule 11, which imposes sanctions for discrete filings, [42 U.S.C.] Section
2000e-5(k) comes into play only after the Title VII claim has been disposed of
and requires the court to assess the strength or weakness of that claim
viewing the case as a whole.”) (emphasis added), vacated on other grounds,
875 F.2d 39 (2d Cir. 1989).
18. Even if EEOC’s motions were properly part of the fee
consideration, this Court granted EEOC’s motion for judicial notice, so that
motion should not warrant any fee award. This Court denied EEOC’s motion to
supplement the record, deeming the proffered supplemental documents
unnecessary. Because this Court affirmed fees based on the absence of
identified claimants and not based on laches, the EEOC agrees that the
proffered documents proved to be unnecessary. Had this Court addressed the
laches issue, however, the proffered documents would have clarified an
important flaw in the district court’s prejudice determination. The EEOC’s
unsuccessful motion thus should not render the EEOC’s appeal unreasonable.
19. EEOC also objects to specific items for which Propak
seeks reimbursement, especially given that Propak’s appellate counsel, John
Cole, is an experienced labor and employment lawyer who represented Propak
below and, therefore, was familiar with the record in this case and the
relevant legal principles.
20. The starting point for determining a reasonable
attorneys’ fee “is the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate.” Hensley v. Eckerhart,
461 U.S. 424, 433 (1983) (emphasis added). The “burden is on the party seeking
the fee award to establish the reasonableness of the hours spent.” Spell v.
McDaniel, 852 F.2d 762, 768 (4th Cir. 1988). Where documentation of hours
worked is inadequate or the hours expended are unreasonable, a court should
reduce the fee award accordingly. Hensley, 461 U.S. at 433-34 (court
may exclude from fee calculation “hours that were not ‘reasonably expended’”).
21. EEOC objects, as excessive on its face, to Propak’s
claim of a total of $109,247.50 as the cost of preparing Propak’s brief and
preparing for oral argument. Based on Exhibit B attached to Propak’s motion
for appellate fees, Propak claims the following legal fees associated with this
appeal:
·
$57,138.00 for preparation
of Propak’s brief, consisting of 114.50 hours of Attorney Cole's time
($40,647.50) and 76.70 hours of Associate Schulz's time (16,490.50);
·
$49,361.50 for
preparation for oral argument, consisting of 111.70 hours of Attorney Coles's
time ($41,144.00), 27.30 hours of two associates' time ($6,222.50) and 13.30
hours of paralegal time ($1,995.00); and
·
Westlaw research
costs of $2,748.
Propak seeks, in addition, other itemized costs, bringing the
total appellate fees for which it seeks reimbursement to $156,731.54. In the
context of the district court’s award of $189,113.50 for legal work performed
while this case was pending for three years before the district court, it is
hard to understand how Propak’s request for over $150,000 in appellate fees could
be reasonable.
22. EEOC also objects to Propak’s claim for over $150,000
in appellate fees as reflecting duplication of legal work that necessarily was performed
when Propak addressed the same issues in district court and, therefore, for
which Propak was already compensated in the district court’s fee award. “The
novelty and difficulty of the questions raised” in the appeal and the
nature and length of the attorney’s professional relationship with the client
are among the twelve factors this Court considers in determining whether hours
claimed are justified. Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d
169, 175 (4th Cir. 1994). Propak argues that it was forced to address new
laches issues in its Response Brief and to prepare to address those issues at
oral argument. However, although EEOC raised two new laches-related legal issues
in its brief, most of EEOC’s brief addressed the same facts and laches
arguments that Propak had already briefed below. See Spell,
852 F.2d at 768-69 (disallowing hours spent addressing issues previously
addressed at trial level).
23. Nor is this the type of case in which it would be
difficult to separate out the hours worked on a “claim-by-claim” basis, as
might be the case where various legal issues involve a common core of facts or
related legal theories. See Knussman v. Maryland, 73 Fed.Appx. 608, 614
(4th Cir. 2003). Here, EEOC’s only new issues on appeal were purely legal
issues, and they comprised a relatively small portion of EEOC’s opening and
reply briefs. EEOC’s 57-page opening brief devoted five pages to one new issue
(Point A) and six pages to the other (Point C). The EEOC devoted only two-and-a-half
pages (in Point B) of its 30-page reply brief responding to Propak’s arguments
concerning the first of those two issues.
24. Moreover, Propak’s documentation offers this Court no
means of isolating and subtracting from Propak’s application the costs related
to a duplication of the research and brief-drafting arguments below, because
neither the log of attorney time nor the log of Westlaw research offers any such
specification. EEOC submits that Propak’s fee application should be denied in
its entirety or, alternatively, reduced substantially because Propak’s
documentation does not permit this Court to determine what hours Propak’s
counsel expended on the two, narrow legal issues that EEOC raised for the first
time on appeal and what hours were expended duplicating research and drafting
arguments addressed in the district court.
25. This Court conducted oral argument four months after
Propak filed its brief. Nevertheless, Mr. Cole represents that he spent almost
the same amount of time preparing for oral argument (106.7 hours) as he spent
drafting the brief (112.30 hours). EEOC submits that these hours are excessive
on their face and fall “outside the realm of a reasonable exercise of billing
judgment.” See Spell, 852 F.2d at 768.
26. EEOC also objects, as excessive, to Propak’s claim
for $7,625.00 for 23.50 hours of attorney/paralegal time (19.50 of
those hours by Attorney Cole, representing $6,922.50 of these costs) relating
to the Joint Appendix that EEOC prepared and filed. This appeal did
not have a complex record below, and the Joint Appendix consisted of only one
volume of less than 600 pages. EEOC originally proposed to include
all laches-related and fee-related motions and each party’s supporting
documentation, but to exclude the parties’ briefs and any
unpublished, electronically-available judicial decisions. Propak asked to
include all briefs and unpublished decisions, and EEOC prepared a Joint Appendix
that incorporated these items. EEOC objects, as excessive, to Propak’s
request for reimbursement of 19.50 hours of attorney Cole's time to
accomplish this straightforward result. See Hensley, 461 U.S. at 434
(court should exclude from fee request “hours that are excessive, redundant, or
otherwise unnecessary”).
27. EEOC also objects to Propak’s claim for 5 hours of
attorney time (totaling $1,607.00) for reviewing and considering whether to
respond to EEOC’s motion to suspend this appeal during the federal government’s
shut-down last October. The motion was necessitated by the fact that all
government employees other than those designated as “essential” were required
to cease performing their government jobs until Congress approved government
funding. EEOC’s request for this Court to suspend the appeal until the
government re-opened was a straightforward request dictated by an extraordinary
event that affected all aspects of the federal government. It should not serve
as a basis for any award of appellate fees.
28. Finally, EEOC objects to Propak’s claim for $2,284
related to circuit-ordered mediation, consisting of 1.10 hours of paralegal
time (at $140 per hour) and 6.0 hours of Attorney Cole’s time (at $355 per
hour).
The Fourth Circuit Mediator assigned to this appeal, Edward G. Smith, confirmed
that this Court’s rules prohibit us from discussing any aspect of the mediation
in this response to Propak’s fee application. Because we cannot address the
mediation, we request that the Propak be awarded no fees for mediation.
WHEREFORE the EEOC respectfully urges this Court to
deny Propak’s motion for appellate attorneys’ fees and expenses or, in the
alternative, to reduce the amount awarded by eliminating fees that are unsubstantiated
or unjustified.
Respectfully
submitted,
P.
DAVID LOPEZ
General
Counsel
CAROLYN
L. WHEELER
Acting
Associate General Counsel
JENNIFER
S. GOLDSTEIN
Acting
Assistant General Counsel
/s/ Susan R. Oxford
SUSAN
R. OXFORD
Attorney,
EEOC
131 M Street, N.E.
Washington, DC 20507
Tel: (202) 663-4791; Fax: (202) 663-7090
susan.oxford@eeoc.gov
